The world’s largest auto market has seen a rising percentage of the population trading in passenger cars and opting for the more versatile sport utility vehicles, but the recent curbs on pollution have redirected those customers towards smaller, more efficient crossovers.
China’s rising middle-class consumers have started upgrading their rides from small, compact and subcompact rides to the ubiquitous SUV – intensifying the competition between domestic brands and the global foreign powerhouses. While in the US the SUV craze has been mostly triggered by the rapidly dropping fuel price, but other powerful forces drive China’s market. Rising wealth is a key factor, but because numerous Chinese cities have started to impose limits on new car registrations to curb emissions and traffic congestion – when the buyers get the chance to purchase a new car they will tend to opt for a larger or more expensive ride. The larger, family-friendly cars, could also be chosen after the country finally relaxed its one-child policy more than a year ago.
The automakers have taken the chance to appeal Chinese customers by introducing more compact SUVs that can easily face the crowded urban environments. Sales of SUVs jumped by more than 30 percent in 2014 to 3.82 million units, also more than doubling since 2012, according to data from the China Passenger Car Association (CPCA). Together with the slowdown in economical growth, China’s overall car deliveries have also cooled down, but the SUVs are in their own league, with their torrid sales pace outgunning sedans, for example. Forecasts put sedans growing a mere one percent in 2015 to 12.5 million units, while SUV deliveries are expected to jump 27 percent to around 5.2 million vehicles during the same period.